Mitsui and Far East sign MOU

MOL and Northern Sea Route

MOL has been participating in the Yamal LNG Project, the world's first large scale energy project that exports cargoes through the Northern Sea Route, and MOL's first ice-breaking LNG carrier for the project is slated to go into service at the end of March, following ice-breaking sea trials in Arctic waters. MOL has also been proceeding with a feasibility study aimed at establishing an LNG transshipment terminal and marketing complex in the Kamchatka area with PAO Novatek - the main shareholder of the Yamal LNG project.

Potential Opportunities of Northern Sea Route

There exist abundant natural energy resources (natural gas, oil, coal, and etc.) in the Arctic area. However, the opportunities for exploiting these resources have been limited because of the unavailability of transportation options in the Arctic. With the reduction of ice in the Arctic and the design of new ice-breaking commercial vessels, the transportation of Arctic natural energy resources has become commercially viable. In the Arctic area, new projects are following in the steps of the Yamal LNG Project. Asian countries, including Japan, who import energy resources, will welcome the access to new energy sources, particularly with respect to energy security, and it is expected that there will be a significant trade growth in energy delivered through the Northern Sea Route.

Moreover, for trades between Europe and Asia, compared with the traditional route via the Suez Canal, the Northern Sea Route is a much shorter distance, which equates to less time, and reduced costs and CO2 emissions for transportation. It is therefore expected that there will be an increase in the trade of goods, in addition to energy resources, through the Northern Sea Route in the future.

The Russian Far East is located at the entrance of the Northern Sea Route, making it an important gateway once the anticipated increase in trade via the Northern Sea Route is realised. This is the key element behind the signing of this Memorandum of Understanding between MOL and FEIA.

Comments from MINVR/FEIA

Currently the FEIA assists the implementation of several mega-projects, including the development of the Northern Sea Route as a reliable and commercially viable corridor for Russian and foreign goods.

"We hope that MOL will be effectively using the Northern Sea Route for transporting cargos to Japan and other Asia-Pacific countries and jointly we will be able to attract significant investments into the Northern Sea Route infrastructure development. The agency is ready to help MOL in implementing all its current and future projects," General Director of FEIA Leonid Petukhov said.

The Minister for the Development of the Russian Far East, Alexander Galushka, emphasised that the cooperation between FEIA and MOL will help to strengthen Russian-Japanese economic cooperation and the development of the Northern Sea Route.

"One of our key goals is to create a model for development of the Northern Sea Route as a global transit corridor between Europe and Asia. It is undoubted that this work helps to reinforce Russian-Japanese economic relations," Alexander Galushka added.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/27022018/mitsui-and-far-east-sign-mou/